QUARTERLY CLOSED-END FUND & BDC REVIEW AND OUTLOOK · QUARTERLY CLOSED-END FUND & BDC REVIEW AND OUTLOOK John Cole Scott, CFS Chief Investment Officer Closed-End Fund Advisors, Inc

QUARTERLY CLOSED-END FUND

& BDC REVIEW AND OUTLOOK

John Cole Scott, CFS

Chief Investment OfficerClosed-End Fund Advisors, Inc.

2nd Quarter 2017 Review &3rd Quarter 2017 Outlook

Intermediate/Advanced CEF Skill Level

July 12, 2017

Closed-End Fund Advisors is a Registered Investment Advisory Firm Specializingin Closed-End Fund & BDC Research, Trading and Management Founded in 1989.

What Is CEF Advisors?• Investment Management, Research & Data

• Independent, Fee Only & Family Owned

• “Scott Letter: Closed-End Fund Report”

• Discretionary Portfolio Management (SMA),Unit Investment Trust (UIT) & Model Service

• CEF & BDC News/SEC Alert & “CEFA’s Closed-EndFund Universe” Report (w/ BDCs).

• Consulting with Institutional Investors and CEF Fund Sponsors

• CEFData.com: CEF/BDC Web Modules Daily Data: Est $1K- $4Kper quarter based on classification (Indv, RIA or FA / Fund Sponsor)

Specializing in CEF/BDC Research, Trading & Portfolio Management

www.CEFadvisors.com

Founded in 1989

What is a Closed-End Fund (CEF) /Business Development Company (BDC) ?

www.CEFadvisors.com 3

o 1940 Act Investment Company with Fixed-Capital,Active Management, and Daily Liquidity

o CEFs have traded on The NYSE since 1893o Tax-advantaged and earnings are passed through to

investors in the form of dividends and distributions(similar to REITs and MLPs)

o CEFs can have debt and preferred shares as leverageso BDCs Limited to 200% asset coverage (total assets /

total debt) or “one turn” of leverage, excluding SBICfacilities (BDCs). Higher fee structure w/ carry

o The closed-end structure is not an asset class but aninvestment vehicle

o BDCs were created by Congress in 1980 to provide an opportunity for individual non-accredited investors to participate in private investments

o BDCs are closed-end funds that provide small, growing companies access to capitalo BDCs are Domestically focused and required to offer portfolio companies ‘managerial

assistance’



-40

-30

-20

-10

0

10

20

30

40

50

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

Trad CEF - Total ReturnJune 30, 2007 - June 30, 2017

NAV TR Price TR


-16

-14

-12

-10

-8

-6

-4

-2

0

2

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

Trad CEF - Average Discount / PremiumJune 30, 2007 - June 30, 2017


-60

-40

-20

0

20

40

60

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

BDC Debt - Total ReturnJune 30, 2007 - June 30, 2017`

NAV TR Price TR


-60

-50

-40

-30

-20

-10

0

10

20

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

BDC Debt - Average Discount / PremiumJune 30, 2007 - June 30, 2017

12

1. First Lien Loans: 55%2. Second Lien Loans: 18%3. Unsecured Loans: 10%4. Equity/Other: 17%

www.CEFadvisors.com

Types of Loans Held By BDCs

Avg Portfolio Turnover: 35.2% Avg Variable Loans: 72% / Fixed: 28% Libor Floors: 42% at 1% Avg Level Avg Loan Size: $9.7M 72% of Loans Under $25MM Average Maturity 4.1 with a range of 2 Years to 6 years Avg No of Loans: 128 from 101 Companies

Source: Data as of June 30, 2017 from CEFData.com


-40

-30

-20

-10

0

10

20

30

40

50

60

70

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

Municipal Bonds - Total ReturnJune 30, 2007 - June 30, 2017

NAV TR Price TR


-14

-12

-10

-8

-6

-4

-2

0

2

4

6

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

Municipal Bonds - Average Discount / PremiumJune 30, 2007 - June 30, 2017

Municipal Bond Closed-End Fund Universe

Source: Data as of June 30, 2017 from CEFA’s Universe Data15

Note: Volatility is a one year rolling calculation

National

Muni Funds

Single State

Muni FundsTotal

Number of Funds 90 81 171

Net Assets (Total) $47,219 $18,492 $65,710

Net Assets $525 $228 $384

Earnings Coverage Ratio % 100.1 101.4 100.7

Premium / Discount % -2.41 -3.66 -3.00

Total Mkt Yield % 5.11 4.55 4.84

Leverage Adj NAV Yield % 3.79 3.27 3.54

NAV Volatility 4.17 3.99 4.09

Leverage % 31.6 34.0 32.7

Leverage Cost % 0.64 0.79 0.71

Duration 8.57 9.27 8.90

Insured % 13.4 18.0 15.6

Investment Grade % 85 91 88

Credit Quality A A A

Municipal Bond Closed-End Fund Universe

Source: Data as of June 30, 2017 from CEFA’s Universe Data16

Tax Equivalent Yield ComparisonMarried Couple with W-2 Income of $1MM+

Sources: CEFA’s Universe Data as of 6/30/2017 and tax rates from IRS and NY State.

17


-60

-40

-20

0

20

40

60

80

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

MLP - Total ReturnJune 30, 2007 - June 30, 2017

NAV TR Price TR


-15

-10

-5

0

5

10

15

20

6/1/2007 6/1/2008 6/1/2009 6/1/2010 6/1/2011 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

MLP - Average Discount / PremiumJune 30, 2007 - June 30, 2017

20

Broad Investable UniverseAssets of Closed-End Funds/BDCs* by type , as of June 30, 2017

$276.3 Billion x 4.2% = ~$12 Billion

in total CEF assets average discount exploitable undervaluation

# of FundsTotal Net

Assets

Premium /

Discount

Market

YieldBeta Duration Leverage

Non Lev

Expense

Ratio

Average

Net Assets

Equity Funds 215 $111,993 -5.22% 6.75% 0.90 14.07% 1.52 $521

Taxable Bond 147 $65,361 -2.89% 7.35% 0.24 3.7 25.57% 1.43 $445

Municipal Bond 171 $65,710 -3.00% 4.84% -0.07 8.9 32.74% 1.02 $384

BDCs 50 $33,281 -8.22% 8.42% 0.74 38.90% 6.10 $666

Total CEFs 583 $276,345 -4.24% 6.49% 0.44 6.6 24.57% 1.74 $474

National Muni Bond 90 $47,219 -2.41% 5.11% -0.06 8.6 31.62% 0.94 $525

Debt Focused BDC 45 $32,581 -4.74% 9.23% 0.77 40.63% 5.73 $724

Covered Call 29 $19,967 -3.78% 8.31% 0.80 2.68% 1.13 $689

US Stock 29 $19,460 -8.64% 6.37% 0.81 12.36% 1.79 $671

MLP Funds 27 $13,533 -1.38% 9.34% 2.00 28.33% 1.87 $501

High Yield Bond 35 $12,978 -5.06% 7.44% 0.28 3.7 22.45% 1.26 $371

World Stock 58 $13,923 -8.41% 4.38% 0.80 5.99% 1.59 $240

Senior Loan 26 $11,550 -3.98% 6.46% 0.12 1.0 31.63% 1.63 $444

Preferred Equity 16 $10,971 0.98% 7.15% 0.17 5.2 30.91% 1.25 $686

REIT Funds 11 $6,024 -8.81% 8.05% 0.70 22.99% 1.41 $548

Convertible Bond 11 $4,365 -3.44% 8.92% 0.77 3.1 28.77% 1.45 $397

Investment Grade Bond 13 $4,016 -1.71% 6.03% 0.13 5.7 19.49% 0.91 $309

CEF Universe Update

www.CEFadvisors.com21

Source: CEFAData.com

Fund GroupingDiscount / Premium Last Q NAV TR Last Q Price TR

Discount Premium Positive Negative Positive Negative

Equity Traditional CEFs 174(81%)

41(19%)

164(76%)

46(21%)

169(79%)

46(21%)

Taxable BondTraditional CEFs

114(78%)

33(22%)

145(99%)

2(1%)

134(91%)

13(9%)

Municipal BondTraditional CEFs

128(75%)

44(25%)

171(100%)

1(0%)

163(95%)

8(5%)

BDCs 35(70%)

15(30%)

43(86%)

6(12%)

17(34%)

33(66%)

ALL CEFs450

(77%)133

(23%)523

(90%)54

(9%)483

(83%)100

(17%)

Data as of June 30, 2017For BDC funds, we show 1Q17 NAV TR, as 6/30/2017 NAV hasn’t been disclosed yet

Current Closed-End Discounts


Source: CEFData.com

US Equity -8.64

Non US Equity -8.41

Special Equity -2.7

Taxable Bond -2.89

Nat Muni Bond -2.41

State Muni Bond -3.66

BDC Debt Focused-4.74

BDC Equity Focused-39.59

-45 %

-40 %

-35 %

-30 %

-25 %

-20 %

-15 %

-10 %

-5 %

0 %

5 %

Ave

rage

CEF

Dis

cou

nt

Avg CEF Discount % as of June 30, 2017

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

-35.00

-30.00

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Main Peer Groups - Average CEF DiscountMay 11, 2012 - June 30, 2017

All Trad CEFs All BDC CEFs Av All Trad CEFs Av All BDC CEFs

Closed-End Discount TrendsTraditional & BDC


Source: CEFData.com

2Q Ended with an average CEF Discount of -4.24%

10 Year Average Discount: -5.12%

Closed-End Discount Trends


Source: CEFData.com

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

- Average CEF DiscountMay 11, 2012 - June 30, 2017

US Equity Non US Equity Special Equity Taxable Bond

Nat Muni Bond State Muni Bond BDC Debt Focused BDC Equity Focused

CEF Volume Trends – 2Q 2017



Fund Grouping Avg Vol2Q 2017

Avg Vol1Q 2017

VolumeTrend

US Equity Funds 122,950 138,842 -11%

Non-US Equity Funds 58,336 64,539 -10%

Specialty Equity Funds 133,310 159,939 -17%

Ave Traditional Equity CEF 109,984 128,020 -14%

Taxable Bond Funds 111,971 146,037 -23%

National Muni Bond Funds 66,584 89,105 -25%

State Muni Bond Funds 24,187 29,941 -19%

Ave Traditional Bond CEF 76,766 100,063 -23%

Average Traditional CEF 90,165 111,414 -19%

Debt Focused BDC Funds 304,856 371,267 -18%

Equity Focused BDC Funds 28,500 53,263 -46%

Average BDC 277,220 326,747 -15%

Average For ALL CEFs 106,208 129,914 -18%

Data as of June 30, 2016

26

6.3%

13.0%

18.7%

22.3%

27.1%

9.4%

2.4% 0.7%

under $100

$100 - $250

$250 - $500

$500 - $1,000

$1,000 - $2,500

$2,500 - $5,000

$5,000 - $10,000

$10,000 +

Note: 583 closed-end funds; data as of 6/30/17, Source: CEFData.com


CEF/BDC Yield Comparison

Data as of 6/30/2017.MLP Index: Alerian MLP Index; REIT Index: Wilshire US REIT Index; Corporate Debt Index: S&P 500 Bond IndexUS High Yield Indices : BofA Merrill Lynch US High Yield (BB Rated, B Rated, CCC and Lower Rated )

9.0% 9.0%

9.5%

8.1% 8.1%7.8%

8.1%

7.2%

6.3%

5.4% 5.4%

3.2%

7.1%

2.8%3.2%

4.3%

5.7%

10.6%

6.7%6.5%

7.4%

6.0%

7.6%

5.8%

7.9%

5.5%

4.6%4.8%

3.9%

2.9%

0%

2%

4%

6%

8%

10%

12%

28

15.1%

33.4%

22.5%

20.2%

6.7%2.1%

Yield Under 4%

Yield 4%-6%

Yield 6%-8%

Yield 8% -10%

Yield 10% -12%

Yield Over 12%

Note: 583 CEFs; data as of 6/30/2017 , cefdata.com

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

-5 %

0 %

5 %

10 %

15 %

20 %

25 %

30 %

Nat Muni Bond - Relative UNIIMay 11, 2012 - June 30, 2017

Nat Muni Bond Av Nat Muni Bond

Relative UNII for TraditionalCEF Municipal Bond Funds

www.CEFadvisors.com 29Source: CEFData.com

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Main Peer Groups - Historical ROCMay 11, 2012 - June 30, 2017

US Equity Non US Equity Special Equity Taxable Bond

Nat Muni Bond State Muni Bond BDC Debt Focused BDC Equity Focused

Return of Capital (90 Day) For CEFs


Source: CEFData.com

Destructive Return of Capital (1YR DRoC)(Traditional)


Source: CEFA’s Closed-End Fund Universe 6/30/2015(www.cefuniverse.com)

Fund Grouping # Funds withDestructive

RoC

% Funds withDestructive

RoC

AverageDestructive

RoC %

1Yr NAVTR vs NAV

Yield

3Yr NAVTR vs NAV

Yield

US Equity Funds 3 10% 17% 159% -45%

Non-US Equity Funds4 7% 20% 330% -55%

Specialty EquityFunds 45 39% 41% -114% -101%

Equity CEF 53 25% 38% 90% -84%

Taxable Bond Funds17 12% 21% 80% -53%

National Muni BondFunds 8 9% 1% -128% 11%

State Muni BondFunds 4 5% 7% -145% 16%

Bond CEF 29 9% 13% -16% -24%

Average CEF 82 15% 29% 30% -49%*Whitepaper

Closed-End FundMarket Price volatility vs. NAV volatility (1 Year)


Source: June 30, 2017 – CEFData.com

0.0 5.0 10.0 15.0 20.0 25.0 30.0

U.S. Equity Funds

Non U.S. Equity Funds

Specialty Equity Funds

Taxable Bond Funds

National Muni Bond

Single State Muni Bond

Debt Focused BDC

Equity Focused BDC

Price Volatility NAV Volatility

CEF Press Release SEC Filings Summary(2517 CEF PRs in 2Q17)

www.CEFadvisors.com 33Source: Fund Press Releases / SEC Filings.

Announcement Type 2Q 2017 2016 2015 2014 Avg per Qsince 2014

Rights Issue / Offering 3 9 6 9 2

Secondary Offering (Trad CEF) 1 6 2 4 1

Secondary Offering (BDCs) 10 4 16 16 4

Tender Offer 14 17 15 16 5

Distribution Policy Change(TradCEF)

3 6 11 19 3

Distribution Policy Change (BDCs) 0 0 1 1 0

13 Filings (Trad CEF) 87 897 906 - 243

New N-2 Filings 13 97 52 31 16

Updated N-2 Filings 65 120 104 52 25

Investment Manager /Advisor Change

9 35 5 20 5

Portfolio Manager Change 25 39 45 60 14

Leverage Amount / Type Change 21 105 52 47 17

CEF & BDCDividend Increases vs. Decreases


Source: Fund Press Releases

DividendAnnouncement

2Q 2017Number of

Announcements

2Q 2017AverageChange

2Q ‘16 – 1Q ‘17Number of

Announcements

2Q ‘16 – 1Q ‘17AverageChange

Dividend Maintains 1245(91.5%) N/A 5408 (88.4%) N/A

Dividend Increases 49 (3.6%) +5.83% 162 (3.0%) +5.76%

Dividend Decreases 67 (4.9%) -6.42% 465 (8.6%) -9.31%

Under 5% Increase 34 (69%) +1.40% 108 (67%) +1.82%

Over 5% Increase 15 (31%) +15.86% 54 (33%) +13.64%

Under 5% Decrease 35 (52%) -2.03% 175 (38%) -2.78%

Over 5% Decrease 32 (48%) -11.21% 290 (62%) -13.25%

2% of announcements “Big Cuts”

0

20

40

60

80

100

120

140

U.S. EquityFunds

Non U.S.Equity Funds

SpecialtyEquity Funds

Taxable BondFunds

National MuniBond Funds

Single StateMuni Bond

Funds

Debt FocusedBDC

EquityFocused BDC

Major CEF Groups: Number of dividend decreases / increasesLast Quarter & Previous 1 Year Rolling

Last Q Decreases

Previous 1 Yr Rolling Decreases

Last Q Increases

Previous 1 Yr Rolling Increases

2Q 2017 Closed-End FundDividend Increases vs. Decreases



CEF Recent Dividend Changes(Policies NOT Promises)



3 Year Dividend Growth• 304 Funds (57%) had negative 3 year growth averaging -19.5%• 75 Funds (14%) had positive 3 year growth averaging +18%

2 Year Lookback -- 370 Funds changed their dividend policy in the past 2 years (70% offunds)• 289 Cut (78%) an average of -12% while 79 (22%) increased an average of +8%

• 186 of these funds have “level” or “managed distributions”• 147 of those were cut an average -10%• 30 were increased an average of +8%

1 Year Lookback• 83 increase vs. 253 decreases. 43 Funds had BOTH increases and decreases in the

past year.

CEF & BDCHistorical IPOs (2Q 17)


Source: SEC Filings, Press Releases

YTD 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Number ofIPOs

5 8 9 15 29 28 26 22 14 3 45

AverageAssets

In $ millions$305 $225 $272 $511 $511 $442 $258 $371 $192 $134 $629

Total NewCEF IPO

Assets in $Billions

$1.6B $1.8B $2.4B $7.7B $14.8B $12.4B $6.7B $8.2B $2.7B $.4B $28.3B

10 Year Average: 19 Funds per year, $350MM Ave Fund, $8.5 Billion Per Year

CEF & BDCHistorical IPOs (2Q 17)


Source: June 30, 2017 - CEFData.com

Inception Assets (M) | # funds

8 10

54 5

5

2

3 23

2 21

23

2 3

3

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

1Q

'13

2Q

'13

3Q

'13

4Q

'13

1Q

'14

2Q

'14

3Q

'14

4Q

'14

1Q

'15

2Q

'15

3Q

'15

4Q

'15

1Q

'16

2Q

'16

3Q

'16

4Q

'16

1Q

'17

2Q

'17

39

$890

$763

$426

$325

$210 $163

$32 High Yield Bond Funds

Debt Focused BDC

Mortgage Bond Funds

Loan Participation

Global Income Funds

Prefered Equity Leveraged

Global Equity

Note: Inception Assets in millions ; data as of 6/30/2017 , cefdata.com

2017 IPO Details2Q 2017


TCG BDC (CGBD) – Debt Focused BDC -

IPOed on June 14, 2016

IPO Price: $18.50 IPO Assets: $763M

Price as of 6/30/17: $18.01 Disc/Prm as of 6/30/17: -1.32%

AllianzGI Conv & Inc 2024 Trg (CBH) – Taxable Bond Funds -

IPOed on June 28, 2017

IPO Price: $10.00 IPO Assets: $165M

Price as of 6/30/17: $10.02 Disc/Prm as of 6/30/17: 2.04%


IPOs during 3Q 2016 – 1Q 2017Current Discount / Premium


Data as of March 31, 2016 Source: CEFAData.com

Ticker Fund Name Type Current Disc/Prm Current Price IPO Price Curr vs IPO

JHB Nuv Hi Incm Nov 2021 Tgt Trm Fd Traditional -0.49% $10.11 $10.00 101.10%

OPP RiverNorth DbLin Stgc Opp Fd Traditional -2.64% $19.54 $20.00 97.70%

GGO Gabelli Go Anywhere Tr Traditional -12.30% $16.83 $20.00 84.15%

IHIT Invsc Hi Incm 2023 Tgt Trm Fd Traditional 0.20% $10.08 $10.00 100.80%

FIV FT Sr Flt Rt 2022 Tgt Trm Fd Traditional 2.75% $10.10 $10.00 101.00%

JPT Nuv Pref & Incm 2022 Trm Fd Traditional -0.47% $25.39 $25.00 101.56%

BGIO 2022 Glbl Incm Opp Tr Traditional 1.62% $10.04 $10.00 100.40%

JCO Nuveen Cr Opp 2022 Tgt Trm Fd Traditional 1.74% $10.04 $10.00 100.40%

Closed-End Fund Mergers


Source: Fund Press ReleasesReasons to Merge:1. Reduce expense ratio2. Increase liquidity3. Reduce bid/ask spread4. Improve cost of future leverage

Avg. – 18 per year36 Last 5 Yrs, 10 previous 7 Yrs

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Nu

mb

ero

fC

lose

d-

End

Fun

ds

Closed-End Funds Merged into Other Closed-End Funds (June 2017)

Closed-End Fund Deaths



Causes: Open-ending, liquidation & conversion. (8.8 per year on average)

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

CEF Funds Open-Ended, Liquidated or Converted to ETF

Converted to ETF

Liquidated

Open-ended

Traditional Closed-End Fund90 Day NAV – Market Price Correlation


Source: June 30, 2017 - CEFData.com

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

-20

0

20

40

60

80

100

120

Trad CEFs Groups - 90 Day NAV/Price CorrelationJune 22, 2012 - June 30, 2017

All Trad CEFs All Equity All Bond US Equity Non US Equity

Special Equity Taxable Bond Nat Muni Bond State Muni Bond

Traditional Closed-End FundNAV – Market Price Correlation



Fund GroupingCorrelation

2Q 17Correlation

1Q 17Correlation

Trend

US Equity Funds 78.71% 79.30% -0.59%

Non-US Equity Funds 86.50% 84.00% 2.50%

Specialty Equity Funds 79.97% 75.80% 4.17%

Ave Equity CEF 81.06% 79.40% 1.66%

Taxable Bond Funds 62.13% 64.10% -1.97%

National Muni Bond Funds 67.50% 47.90% 19.60%

State Muni Bond Funds 59.05% 46.00% 13.05%

Ave Bond CEF 62.87% 54.90% 7.97%

Average CEF 70.21% 64.80% 5.41%


2Q17 , YTD and 1Q17 Closed-End FundNAV / Market Price Performance

www.CEFadvisors.com 46Source: CEFAData.com

Fund Grouping 2Q 2017NAV

1Q 2017Mkt Pr

YTDNAV

YTDMkt Pr

1Q 2017NAV

1Q 2017Mkt Pr

US Equity Funds 3.4% 5.7% 9.3% 13.7% 5.8% 7.7%

Non-US Equity Funds 5.4% 6.9% 15.6% 20.3% 9.6% 12.5%

Specialty Equity Funds -0.3% 2.0% 4.7% 9.4% 5.0% 7.3%

Avg Traditional Equity CEF 1.9% 4.1% 8.5% 13.4% 6.4% 8.8%

Taxable Bond Funds 2.5% 3.5% 6.0% 8.3% 3.5% 4.6%

National Muni Bond Funds 2.8% 3.7% 4.8% 6.5% 2.0% 2.7%

State Muni Bond Funds 2.7% 3.5% 4.5% 5.5% 1.8% 2.0%

Avg Traditional Bond CEF 2.6% 3.6% 5.3% 7.1% 2.6% 3.4%

Average Traditional CEF 2.3% 3.8% 6.6% 9.6% 4.1% 5.6%

Debt Focused BDC 2.3% -2.1% 3.7% 4.6% 2.3% 7.3%

Equity Focused BDC 0.2% 0.0% -1.4% 3.6% 0.1% 4.3%

Average BDC 2.1% -1.9% 3.2% 4.5% 2.0% 6.8%


CEF / BDC Index Performance

www.CEFadvisors.com 47Source: CEFAData.com

Fund Grouping 2Q 2017NAV

2Q 2017Mkt Pr

1 YearNAV

1 YearMkt Pr

5 YearNAV

5 YearMkt Pr

12 Major Sectors Index 2.2% 3.5% 12.4% 14.8% 9.1% 8.6%

High Income Index 1.8% 3.2% 17.0% 19.9% 8.3% 7.4%

Tax-Sensitive Income Index -0.8% 1.3% 6.9% 7.9% 4.7% 4.1%

60/40 Balanced Index 3.4% 4.7% 14.6% 19.3% 9.6% 9.5%

Global Equity Index 4.7% 6.6% 18.8% 24.5% 11.1% 11.2%

Equity Income Index 2.7% 5.1% 12.5% 18.1% 8.8% 9.2%

Taxable Bond and BDC 2.4% 3.2% 11.7% 13.9% 7.5% 6.6%

National Municipal Bond 2.5% 3.5% -1.6% -3.9% 5.9% 4.7%

Preferred Equity Index 4.4% 6.1% 12.9% 10.6% 11.0% 10.2%

Convertible Bond Index 3.3% 5.0% 19.5% 25.8% 8.6% 8.2%

High Yield Bond Index 2.2% 2.5% 15.9% 14.8% 8.2% 5.1%

Sr. Loan Index 0.8% 0.3% 11.4% 17.0% 6.7% 6.1%

MLP Index -9.1% -6.5% 5.5% 9.3% 0.7% -0.7%

REIT / Real Asset Index 3.7% 5.4% 5.8% 8.0% 11.1% 10.6%

Debt-BDCs Index 1.9% -2.0% 9.6% 20.8% 10.2% 9.9%Data as of June 30, 2017, Annualized over 1 year


CEF Institutional Holdings(Traditional CEFs 2Q 17)

Source: CEFData.com

InstitutionalHoldings Trends

Increase: 318 fundsDecrease: 186 funds

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

0.0 %

5.0 %

10.0 %

15.0 %

20.0 %

25.0 %

30.0 %

35.0 %

40.0 %

45.0 %

Trad CEFs Groups - % Shares Owned by InstitutionsJanuary 18, 2013 - June 30, 2017




BDC Institutional OwnershipLa

rges

tIn

stit

uti

on

alH

old

er(%

)

Note: Data as of 7/11/2017 , cefdata.com

BDC Shares Owned by Institutions (%)Approved Below NAV Offering (2Q)

GAIN0

5

10

15

20

25

30

0 10 20 30 40 50 60 70

CEF/BDCActivist / Institutional Investors



Activist:1. Ancora Advisors2. Bull Dog Investors3. Special Opportunities Fund

(SPE -- Bulldog)4. Ironsides Partners5. Karpus Investment Management6. Western Investment7. Elliott Associates (BDCs)8. Wynnefield Capital (BDCs)

Followers:1. City of London2. Punch & Associates Investment

Management3. Relative Value Partners4. Rivernorth Capital Management5. Saba Capital Management6. SIT Investment Associates7. DG Capital Management (BDCs)8. Sims Capital Management (BDCs)

Total Assets at work 12/31/16 - $1.5 Billion Activist // $6.5 Billion Followers & Activist

Closed-End Fund Corporate Actions /Activist Update

2Q 2017

www.CEFadvisors.com 51Source: SEC Filings, Press Releases

MonthFiled

Filing Closed-End Fund/BDC Investor/Who Notes

Jun 13D/A AC Enh Gwth & Incm Fd (LCM) Bulldog Dec(7.02%)

Jun 13D/AChina Fund (CHN)

City of London Inc(24.9%)proposed Invstmnt and Mgmt

Agreement

Jun 13D/A Fed Prmr Imd Muni Incm Fd (FPT) Karpus 21.1%Reorganization and

Tender

Jun Offering Fidus Investment Corp (FDUS) Public 1,750,000 shares@$16.8

Jun 13D Invsc Hi Incm Tr II (VLT) Saba Inc(9.89%)Discussions with mgmt

Jun 13G/A Madison Stgc Sctr Prm Fd (MSP) Karpus 30.58%Opposition to reorganization

Jun Rights Reaves Util Incm Fd (UTG) Public 1 for 3


Closed-End Fund Corporate Actions /Activist Update



MonthFiled

Filing Closed-End Fund/BDC Investor/Who Notes

May Tender AC Convt Sec & Incm Fd (AVK) Saba Up to 15% @ 98%of NAV

May Offering Alcentra Capital Corp (ABDC) Public 1,691,839 shares @$13.68

May NAVProposal

Ares Capital Corp (ARCC) Public Sell shares belowNAV

May 13G/A JPMorgan China Region Fd (JFC) City of London Discount Mgmt Plan

Apr Tender New Ireland Fd (IRL) Public Up to 30% @ 98%of NAV

Apr Rights NexPoint Cr Stgs Fd (NHF) Public 1 for 3


CEF Activist Holdings(Traditional CEFs 2Q 17)

Source: CEFData.com

ActivistHoldings Trends

Increase: 68 fundsDecrease: 79 funds

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q2-15

Q3-15

Q4-15

Q1-16

Q2-16

Q3-16

Q4-16

Q1-17

0.0 %

5.0 %

10.0 %

15.0 %

20.0 %

25.0 %

30.0 %

35.0 %

40.0 %

Trad CEFs Groups - % Shares Owned byActivistsJanuary 25, 2013 - June 30, 2017



-25

-20

-15

-10

-5

0

5

10

15

5 15 25 35 45 55 65 75


Pre

miu

m/

Dis

count

(%)

Note: Data as of 7/11/2017 , cefdata.com

Shares owned by Activists / Followers(%)

55

$1,396

$853

$537

$343

$118$108 $49 Non U.S. Equity

BDC

Taxable Bond

U.S. Equity

Specialty Equity

Hybrid / Balanced

National Muni Bond

Note: millions of dollars, data as of 7/11/2017, cefdata.com

CEF Activist Ownership $3,404

Asian Equity $1,003

BDC Debt $813

General Equity $343

US Government Bond $290

Latin American Equity $150

Top 5 Peer Groups

56

$6,300

$4,172$3,815

$2,930

$1,461

$1,261

$574 $394Taxable Bond

Non U.S. Equity

Specialty Equity

BDC

U.S. Equity

National Muni Bond

Single State Muni Bond

Hybrid / Balanced

Note: millions of dollars, data as of 4/19/2017, cefdata.com

CEF Activist Ownership $20,907

BDC Debt $2,770

Asian Equity $2,257

Covered Call $1,448

High Yield Bond $1,362

MLP Funds $1,185

Top 5 Peer Groups

CEFA’s Outlook for 3Q and 2017


• US Equity Funds• Non-US Equity Funds• Specialty Equity (Sector) Funds

• Taxable Bond Funds

• National Municipal Bond (Tax-Free) Funds• State Specific Municipal Bond (Tax-Free) Funds

• Debt-Focused Business Development Companies (BDCs)• Equity-Focused Business Development Companies (BDCs)

• Sustainable CEF Portfolio Distribution Yields, Beta, Correlations,Duration and After-Tax Income, Gross Asset Exposure, Leverage

Possible Trump Impact to BDCs and CEFs(Sectors / DOL / Trends and Products)



CEF / BDC - Sectors• Municipal Bond CEFs / QDI• MLP / Infrastructure• “Typical” Equity Funds• Duration Bonds/Preferred• Sr. Loans / BDCs

Products of BDCs/CEFs• Index Inclusion ?• Acquired Fund Fees• Banks competing with BDCs?• ETFs, CEFs, OEFs, A-ETFs

Market Trends• Taxes• Regulations• Market Risk• Interest Rates• Cost & Type of Leverage

DOL• CEF / BDC IPOs & Secondary’s• CEF Products – UITs in IRAs?• Pushed back – How far? Ever?• Fiduciary vs. Suitability• Kill or fix BDC/CEFs IPOs ?


Closed-End Funds & BDCsin a Rising Rate Environment

(March 2004 to September 2007)

Full articleon our blog:

www.CEF-Blog.com

CEFData.com

www.CEFadvisors.com60

CEFDATA.COM – Data Updates Daily and Live with Analysis Updates Free Public CEF/BDC Profiles & 26 CEF/BDC Indexes Watchlists, Models, Portfolio, Screener, PR/News ad SEC Filings Database

Show how portfolio/model changes with swaps or allocation changes View and Summary Reports

Fund Sponsor Modules Compare a Fund to Dynamic Peer Groups and Selected Peers

Expecting to add 1-2 modules per month: List on www.CEFdata.com

30 Day Free Trial and free CEFU/DA while in development withguaranteed renewals at 25% off through July 31, 2018 for Q WebinarAttendees (Promo code CEFD2017) that sign up by August 31, 2017.

Pricing per Quarter is $1K (Individual) $2K (Small RIA/FA) $3K LargeRIA/Hedge Fund, $4K Fund Sponsor/Product Sponsor. We always offerprorated refunds and include 30 minutes per quarter free consulting timewith John Cole Scott for paid subscribers.

CEF Advisors Links


• CEF Advisors’ Website: www.CEFadvisors.com• CEF/BDC Index Data: www.CEFdata.com/cefaindex• CEFA’s Blog: www.CEF-Blog.com /

CEF/BDC Research Sites: www.BDCUniverse.net -- www.CEFdata.com

• Published Articles• Seeking Alpha: http://seekingalpha.com/author/john-cole-scott/articles• WealthManagement.com: http://wealthmanagement.com/author/john-scott

• Vimeo Channel: https://vimeo.com/johncolescott/videos

• Weekly CEF Data (14 Day Trial), Daily News Alerts (10 Day Trial),www.CEFUniverse.com

• CEF Universe Data Definitions:http://www.cefadvisors.com/Download/CEFUDataDefinitions.pdf

• CEFA’s Form ADV Part 2A and 2Bhttp://www.cefadvisors.com/Download/ADV-II-Form.pdf

62

For Your InformationCEF Resources

CEF/BDC Fund Profiles: www.cefdata.comCEFAnalyzer LLC: http://CEFanalyzer.com

The Closed-End Fund Association: www.Closed-EndFunds.com

CEF Connect (Nuveen Sponsored): www.CEFconnect.com

Morningtar's CEF Site:http://www.morningstar.com/Cover/CEF-Closed-End-Funds.aspx

Investment Company Institute: http://www.ici.org/research#fact_books

CEFNetwork (Pristine Advisers): www.CEFnetwork.com

CEF Insight (Activist Info from AST Fund Solutions): www.CEFinsight.com

Capital Link's CEF Portal: http://cef.capitallink.com/

Morningstar Discussion Board:http://socialize.morningstar.com/NewSocialize/forums/100000006.aspx

Yahoo CEF Discussion Board: https://groups.yahoo.com/neo/groups/closedendfunds2/info

The CEF Network on LinkedIN: www.CEF-Network.com

Seeking Alpha: http://seekingalpha.com/articles?filters=closed-end-funds

More Useful Links at: www.cefadvisors.com/investRes.html

View online: www.cefdata.com/portfoliocomp -- Disclosure: See full portfolio disclosures at the end of this presentation

Current CEFA Portfolio Modes

www.CEFAdvisors.com

Disclosure: See full portfolio disclosures at the end of this presentation

67

Speaker’s Biography


EXPERIENCE

CIO of Registered Investment

Advisor Focused Exclusively on CEFs

& BDCs since 2001

EDUCATION

College of William & Mary

Bachelor of Science in Psychology

2000


Chief Investment Officer of Closed-End Fund Advisors

Mr. Scott has worked at Closed-End Fund Advisors since 2001. He holds theFINRA 66 License and the Certified Fund Specialist designation (CFS). He is agraduate of The College of William and Mary and has been quoted andinterviewed widely in the financial press and presented at conferences and forinvestment groups on more than 50 occasions.

In 2008 John founded CEFA's Closed-End Fund Universe, a data servicecovering all US listed closed-end funds and BDCs. Currently supported by aninternal 9 member analyst team with a data manager/ programmer coveringthe 550+ ticker universe of CEFs/BDCs. They regularly do consulting andprojects for CEF/BDC Sponsors, Hedge Funds and Institutional Investors.

Portfolio Consultant with over a quarter billion deposits into a fund focused onBDCs with a fund sponsor partner. He developed 26 CEF/BDC based indexes; 8diversified portfolio objective, 8 Equity and 10 Bond sector. John is a pastboard member of The Richmond Association for Business Economics (RABE),and serves as Assistant Treasurer and on the Investment Committee for TheNew York State Society of The Cincinnati. Board member and Finance &Investment Committees for The William & Mary National Alumni Board.

www.CEFadvisors.com

Important: The information in this presentation is not for general circulation and should not beconsidered an offer, or solicitation, to deal in any of the mentioned funds. The information isprovided on a general basis for information purposes only, and is not to be relied on as advice, as itdoes not take into account the investment objectives, financial situation or particular needs of anyspecific investor.

Any research or analysis used to derive, or in relation to, the information herein has been procuredby Closed-End Fund Advisors (“CEFA”) for its own use, and may have been acted on for its ownpurpose. The information herein, including any opinions or forecasts have been obtained from or isbased on sources believed by CEFA to be reliable, but CEFA does not warrant the accuracy,adequacy or completeness of the same, and expressly disclaims liability for any errors oromissions. As such, any person acting upon or in reliance of these materials does so entirely at hisor her own risk. Any projections or other forward-looking statements regarding future events orperformance of countries, markets or companies are not necessarily indicative of, and may differfrom, actual events or results. No warranty whatsoever is given and no liability whatsoever isaccepted by CEFA or its affiliates, for any loss, arising directly or indirectly, as a result of any actionor omission made in reliance of any information, opinion or projection made in this presentation.

The information herein shall not be disclosed, used or disseminated, in whole or part, and shall notbe reproduced, copied or made available to others without CEFA expressed written permission.CEFA reserves the right to make changes and corrections to the information, including any opinionsor forecasts expressed herein at any time, without notice. Data comes from our CEF Universeservice dated June 30, 2017 unless otherwise noted.


Closed-End Fund Advisors, Inc

7204 Glen Forest Drive, Suite #105Richmond, Virginia 23226 U.S.A(800) 356-3508 / (804) 288-2482

[email protected]

www.CEFData.com

Thank You For Attending

Questions?

Documents

QUARTERLY CLOSED-END FUND & BDC REVIEW AND OUTLOOK · QUARTERLY CLOSED-END FUND & BDC REVIEW AND OUTLOOK John Cole Scott, CFS Chief Investment Officer Closed-End Fund Advisors, Inc